Global Study Confirms That Telematics is the Future of Insurance
Telematics insurance is here to stay. It’s also set to become much more widespread across the global car insurance industry. According to a study by PTOLEMUS Consulting Group, in just five short years, close to 100 million vehicles will have telematics policies. So, drivers, now may be the time to learn more about telematics and how it’s impacting insurance.
Telematics refers to in-vehicle technology that measures the way you drive. For example, telematics can measure how hard you brake, how fast you drive, and how smoothly you turn. In brief, telematics insurance, also called usage-based insurance, collects enough information about your driving habits to tell insurers whether or not you’re a safe driver.
The goal of telematics is to give drivers an opportunity to earn reduced premiums. Consumers currently have a number of other options for reducing their rates, including comparing quotes. However, telematics offers insurers a new and potentially more accurate method for calculating individual rates.
PTOLEMUS’s study, "Usage-based Insurance: Global Study", forecasts the way in which telematics will affect car insurance in upcoming years. The Canadian Underwriter shares a couple highlights from the report.
For example, the detailed repot predicts that in 15 years, close to 50% of the cars on the road will be insured with telematics. Right now, there are at least 230 telematics insurance programs across the globe. Strictly in Canada, there are about ten programs. Telematics is still relatively new to North America, although it’s steadily becoming more common in the United States.
The PTOLEMUS’s study asserts that telematics will alter the car insurance business model. The study also suggests that usage-based insurance will soon expand into home, health, and life insurance too. What does all of this mean for insurance companies? They will have to quickly evolve as advanced technology shakes up the industry and as consumer expectations change. Meanwhile, drivers will need to decide if a telematics policy is the right fit for them.
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